Morning Update – 04/11/2016 – by Arjun Lakhanpal

Morning all.. Another rather soft session on Wall St which closed down 0.44% even though some risk aversion was quelled and the likes of USDMXN reversed early strength. The US election is still a tight race and that is unnerving equities still. Asia had a soft session after falls in oil in NY into the close and the Nikkei closed down another 1.3%, even though USDJPY rebounded from the lows and sits back above 103.00. US yields are barely changed from NY close. GBP has held onto gains made yesterday after the Government lost the first challenge to A50 vote and this now goes to the Supreme Court. GBP also higher on Carney comments suggesting inflation is now a concern and that they have moved to a neutral bias. He also said they could not look through higher inflation indefinitely and this saw UK yields rise and GBP with them. BoE’s Carney (BBC): inflation is tough on low-income households; main cause of inflation is GBP depreciation; BoE is not giving any guidance on where policy may go. On the data front Japan Oct PMI Services rose to 50.5 from 48.2 prior and there are signs of global PMI’s picking up on a broad basis. Australia Sept Retail Sales beat; 0.6% m/m vs 0.4% consensus. RBA Quarterly Statement: inflation expected to remain low for sometime before gradually returning to normal levels; little change in forecasts on aggregate growth & no material change to underlying inflation vs Aug; considerable uncertainty about momentum in domestic labour mkt; flow of data has been consistent with earlier f/c; downside risks to China growth in near term have diminished; evidence that wage growth has stabilised. This morning we get Services PMI from Spain, Italy, France and Germany. Most data to be trumped by the Non-farm payrolls from the US later.. Good luck..